United States District Court, E.D. Pennsylvania
R. Sánchez, C.J.
ARC DBPPROP001, LLC (ARC) brings this action pursuing breach
of contract and ejectment claims against Defendants Easton
Buffet LLC (Easton), and Jin Chun Yang and Dan Li
(collectively, the Guarantors). ARC alleges Easton breached
its commercial lease agreement with ARC by failing to pay
amounts owed and, due to its breach, is in unlawful
possession of the leased property. In seeking relief, ARC
also alleges the Guarantors are liable as personal guaranties
on the lease. The parties have filed cross-motions for
summary judgment pursuant to Federal Rule of Civil Procedure
56. Because there is no genuine issue of material fact
regarding ARC’s claims for relief and Defendants’
liability, the Court will grant ARC’s Motion for
Summary Judgment and deny Defendants’ Motion for
in the business of leasing commercial real property and
improvements. The commercial property at issue in this action
is a parcel of land and commercial building within the
Warrington Retail Center Condominium located at 377 Easton
Road, Warrington, Pennsylvania 18976 (the Premises).
See Pl.’s Ex. 1-A, 1-B. Pursuant to multiple
assignment of lease agreements, ARC became the tenant to the
Premises under a lease agreement (the Ground Lease) with PR
Warrington Limited Partnership, as landlord, on January 8,
2014. See Pl.’s Ex. 1-B, 1-I. Also, ARC became
the landlord to the Premises under another lease agreement
(the Master Lease Agreement, MLA) with Hometown Buffet, Inc.
(HTB) and OCB Realty Co. (OCB), each as tenant. See Id
. Ex. 1-F. At the time of filing this action, the
Premises was subject to two leases, the Ground Lease and the
MLA. ARC is the tenant under the Ground Lease and the
landlord under the MLA.
Ground Lease was originally entered into on February 9, 2000,
and provided a 10-year lease term with four renewal options
of five years each. See Id . Ex. 1-B. The original
parties to the Ground Lease were OCB, as tenant, and PR
Warrington Limited Partnership, as landlord. See Id
. OCB subsequently assigned its rights, title and
interest in, to and under the Ground Lease to FP2-7, LLC
(FP2-7) on December 11, 2002. See Id . Ex. 1-C. On
the same day, FP2-7 subleased the Premises to FP2 LLC (FP2).
See Id . Ex. 1-E. FP2, then, as landlord, entered
into the MLA with HTB and OCB, each as tenant. See Id
. Ex. 1-F.
30, 2008, OCB, as Sublessor, subleased the property to
Easton, as Sublessee (the Easton Buffet Sublease).
See Pl.’s Ex. 1-G; Compl. Ex. F. The Easton
Sublease provides several terms over 13 pages, incorporates
PR Warrington and FP2’s consent, and includes three
attached Schedules and two amendments. See Id . On
the signature page of the Easton Sublease, Yang signed on
behalf of Easton and beneath her signature she wrote
“Owner.” See id.; Yang Dep. 34:8-34:21.
All documents attached to the Easton Sublease, including a
Nondisturbance and Attornment Agreement, were signed by Yang
on behalf of Easton. See id. On each signature page
she listed herself as either the “Owner” or
“Managing Member” of Easton. See id.
Easton Sublease provides for Easton’s right to possess
and use the Premises and in consideration thereof, Easton is
required to pay certain amounts of Minimum Rent and
Additional Rent to the Sublessor. The Easton Sublease states:
6.1 Minimum Rent. In addition to
the Purchase Price (as defined in Section 18.2 hereof),
Sublessee shall pay to Sublessor, without deduction, setoff,
notice, or demand, as minimum rent for the Premises, any and
all amounts due under the [MLA] with respect to the Premises,
including any and all Required Payments, Basic Rent, Prime
Lease Basic Rent, Additional Rent and any and all other
amounts due from time to time under the terms of the [MLA]
and any applicable Prime Lease (as defined in the [MLA])
(collectively, the “Minimum
6.2 Additional Rent. If [the MLA]
requires Sublessor to pay to Master Lessor all or a portion
of the expenses of operating the building, shopping center,
development and/or project of which the Premises are a part
(“Additional Rent) . . . then
Sublessee shall pay to Sublessor all such Additional Rent.
. . .
Additional Rent is due to Master Lessor, and shall include,
but not limited to, the following amounts:
(1) all taxes . . . charged to the Premises . . .; and
(2) all common area maintenance expenses . . . charged to the
Pl.’s Ex. 1-G, § 6.1-6.2. As part of this
obligation to pay Minimum and Additional Rent (collectively,
Rent), the parties agreed an Event of Default occurs if
“Sublessee defaults in any payment of Rent when
due.” See Id . §§ 27, 27.8.
addition to the Easton Sublease, the Guarantors signed
“Schedule 2 – Guaranty of Lease” (the
Guaranty), in which they each signed individually agreeing to
guaranty “all of the obligations of Sublessee under the
Sublease.” See Pl.’s Ex. 1-G, 21. The
This is a continuing and irrevocable Guaranty and such powers
may be exercised as often as necessary, as well as after the
expiration of the original term and/or during any extension
or renewal of the Sublease. In the event the Sublease is
assigned pursuant to its terms, then this Guaranty shall
continue in full force and effect unless a written release of
this Guaranty is executed by Sublessor. The liability of each
of the Sublease Guarantors under this Guaranty is absolute
and unconditional without the necessity of Sublessor first
obtaining a judgment against Sublessee. . . . Each of the
Sublease Guarantors agrees that without prior notice to or
consent of any of the Sublease Guarantors, Sublessor and
Sublessee may agree to extend or modify any term or provision
of the Sublease, and each of the Sublease Guarantors shall be
bound by such extension or modification as if such Sublease
Guarantor had expressly consented thereto. . . .
January 8, 2014, FP2-7 assigned all of its rights, title and
interest in, to and under the Ground Lease to ARC pursuant to
the terms of a Memorandum of Assignment (the MOA) and Ground
Lease Assignment. See Pl.’s Ex. 1-I;
Pl.’s Resp. to Defs.’ Mot. for Summ. J. Ex. ii.
On that same day, FP2 assigned all of its rights, title and
interest in, to and under the MLA to ARC, as assignee.
See Pl.’s Ex. 1-K. As a result of this
transaction, ARC ...